The past 12 months have seen significant and fundamental change in the regional economic landscape.
Oil prices, which were already significantly down on the levels seen over the previous three years at the start of 2015, continued to fall throughout the year, casting dark clouds over the economic outlook. In January, the accession of King Salman bin Abdulaziz al-Saud to the throne in Saudi Arabia launched sweeping changes across the top levels of leadership in the kingdom. And violence in Syria, Libya and Yemen continued spreading unrest across the region.
Changes will come as part of a huge rebalancing of the regional economy
But 2015 also saw the re-emergence of two giant markets in Egypt and Iran, as Cairo rolled out an ambitious economic development plan and Iran reached an agreement with international powers over its nuclear programme and the lifting of sanctions.
These huge changes have shaped the past 12 months and, as we embark on a new year, the full ramifications of the regions Year of Change are still being felt.
In the coming year, governments across the region will respond to the impact of low oil prices by fundamentally readjusting their fiscal policies to cut spending, raise taxes and increase borrowing. In addition, growing concerns about regional instability and unrest will see their focus continue to shift towards security measures.
These changes will come as part of a huge rebalancing of the regional economy that will see liquidity tighten and a hardening in market conditions; 2016 is set to be a tough year.
But it is not all doom and gloom. There are many bright spots for business across the region that will continue to provide opportunities for investment.
Saudi Arabia, the regions biggest economy and most exciting market, has committed to maintaining spending to continue its essential job creation and diversification drive. Direct government spending in the kingdom will be at lower levels than over the past few years and Riyadh will seek to raise its borrowing to finance its programmes. Meanwhile, Kuwait and Qatar will also continue to invest; Dubai will continue its drive towards Expo 2020 and beyond; and Doha will continue building towards footballs Fifa World Cup in 2022.
We can also expect to see an acceleration of initiatives to tap private investment through new and alternative models for the financing and delivery of public services and projects. Various forms of the public-private partnership model will be developed in the coming months and years. In parallel, new legislation will seek to stimulate company creation and equity investment in the regions stock markets.
And, despite significant hurdles that are still to be overcome, Egypt and Iran will steadily expand and open up to foreign investment and international business as the respective governments in Cairo and Tehran get to grips with the structural reform measures required to create confidence and stability.
The year ahead promises to be tough for governments and business alike, and it is certain to see consolidation, downsizing and cutbacks across the region. By the end of the year, however, the regional market will have adjusted to a new reality. The outlook will turn more positive than today, and both public and private sector organisations will be in better, leaner condition and well set for the next phase of this regions incredible growth story.